Other Assets

12 Months Ended

Dec. 31, 2012

Other Assets Disclosure [Abstract]

Other Assets

NOTE 8

Other Assets

The following is a summary of other assets as of December 31:

(Millions)	2012		2011
Goodwill	$	3,181	$	3,172
Deferred tax assets, net(a)		2,458		2,875
Prepaid expenses(b)		1,960		2,378
Other intangible assets, at amortized cost		993		1,149
Derivative assets(a)		593		915
Restricted cash(c)		568		584
Other		1,665		1,582
Total	$	11,418	$	12,655

• Refer to Notes 17 and 12 for a discussion of deferred tax assets, net, and derivative assets, respectively, as of December 31, 2012and 2011. Derivative assets reflect the impact of master netting agreements.
• Includes prepaid miles and reward points acquired primarily from airline partners of approximately $1.4 billion and $1.8 billion, as of December 31, 2012 and 2011, respectively, including approximately $1.1 billion and $1.5 billion, respectively, from Delta.
• Includes restricted cash of approximately $76 million and $207 million, respectively, as of December 31, 2012 and 2011, which is primarily held for coupon and certain asset-backed securitization maturities.

Goodwill

Goodwill represents the excess of acquisition cost of an acquired company over the fair value of assets acquired and liabilities assumed. The Company assigns goodwill to its reporting units for the purpose of impairment testing. A reporting unit is defined as an operating segment, or a business that is one level below an operating segment for which discrete financial information is regularly reviewed by the operating segment manager. The Company evaluates goodwill for impairment annually as of June 30 and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value.The goodwill impairment test utilizes a two-step approach. The first step in the impairment test identifies whether there is potential impairment by comparing the fair value of a reporting unit to the carrying amount, including goodwill. If the fair value of a reporting unit is less than its carrying amount, the second step of the impairment test is required to measure the amount of any impairment loss. As of December 31, 2012and 2011, goodwill was not impaired and there were no accumulated impairment losses.

Goodwill impairment testing involves management judgment, requiring an assessment of whether the carrying value of the reporting unit can be supported by its fair value using widely accepted valuation techniques. The Company uses a combination of the income approach (discounted cash flow method) andmarket approach (market multiples).

When preparing discounted cash flow models under the income approach, the Company uses internal forecasts to estimate future cash flows expected to be generated by the reporting units. Actual results may differ from forecasted results. The Company calculates discount rates based on the expected cost of equity financing, estimated using a capital asset pricing model, to discount future cash flows for each reporting unit. The Company believes the discount rates used appropriately reflect the risks and uncertainties in the financial markets generally and specifically in the Company's internally developed forecasts. Further, to assess the reasonableness of the valuations derived from the discounted cash flow models, the Company also analyzes market-based multiples for similar industries of the reporting unit, where available.

The changes in the carrying amount of goodwill reported in the Company's reportable operating segments and Corporate & Other were as follows:

									Corporate &
(Millions)	USCS		ICS		GCS		GNMS			Other	Total
Balance as of January 1, 2011	$	175	$	511	$	1,544	$	159	$	250	$	2,639
Acquisitions(a)		―		538		―		1		20		559
Dispositions		―		―		(1)		―		―		(1)
Other, including foreign currency translation		―		(26)		―		―		1		(25)
Balance as of December 31, 2011	$	175	$	1,023	$	1,543	$	160	$	271	$	3,172
Acquisitions		―		1		―		―		―		1
Dispositions		―		(2)		(1)		―		―		(3)
Other, including foreign currency translation		―		9		2		―		―		11
Balance as of December 31, 2012	$	175	$	1,031	$	1,544	$	160	$	271	$	3,181

• Primarily comprised of the acquisition of Loyalty Partner in 2011. Refer to Note 2 for further discussion.

Other Intangible Assets

Intangible assets, primarily customer relationships, are amortized over their estimated useful lives of 1 to 22years on straight-line basis. The Company reviews intangible assets for impairment quarterly and whenever events and circumstances indicate that their carrying amounts may not be recoverable. In addition, on an annual basis, the Company performs an impairment evaluation of all intangible assets by assessing the recoverability of the asset values based on the cash flows generated by the relevant assets or asset groups. An impairment is recognized if the carrying amount is not recoverable and exceeds the asset's fair value.

The components of other intangible assets were as follows:

		2012						2011
(Millions)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships(a)	$	1,238	$	(526)	$	712	$	1,223	$	(407)	$	816
Other		428		(147)		281		445		(112)		333
Total	$	1,666	$	(673)	$	993	$	1,668	$	(519)	$	1,149

• Includes net intangibles acquired from airline partners of $358million and $410 million as of December 31, 2012 and 2011, respectively, including approximately $156 million and $195 million, respectively, from Delta.

Amortization expense for the years ended December 31, 2012, 2011 and 2010was $198 million, $189 million and $176 million, respectively. Intangible assets acquired in 2012 and 2011 are being amortized, on average, over 6 years and 13 years, respectively.

Estimated amortization expense for other intangible assets over the next five years is as follows:

(Millions)		2013		2014		2015		2016		2017
Estimated amortization expense	$	200	$	170	$	151	$	126	$	75

Other

The Company had$427 million and $332 million in affordable housing and other tax credit investment partnership interests as of December 31, 2012 and 2011, respectively, included in other assets in the table above. The Company is a non-controlling partner in the affordable housing and other tax credit investment partnerships. These partnership interests are accounted for in accordance with GAAP governing equity method investments and joint ventures.